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U.S. Intellectual Property and New Media Law Update HOW DO I COUNTERFEIT THEE, LET ME COUNT THE WAYS Rolex Watch USA, Inc. v. Meece (Fifth Circuit - October 21, 1998) WHICH WALT DISNEY COMPANY? Rapp v. The Walt Disney Company, Inc. (E.D. Pa. -September 1998) INNOVATIVE BUSINESS - INNOVATIVE COPYRIGHT INFRINGEMENT Ryan, et al. v. Carl Corp., et al. (N.D. Cal -October 13, 1998) STREETWISE IS NOT STREETSMART Streetwise Maps, Inc. v. VanDam, Inc. et al. (Second Cir. -October 27, 1998) HOW DO I COUNTERFEIT THEE, LET ME COUNT THE WAYS Rolex Watch USA, Inc. v. Meece (Fifth Circuit - October 21, 1998) Defendant looked at Rolex's profits and decided that there was money to be made in them there watches. Among other things, he made non-genuine parts designed solely for use in genuine Rolex watches; made enhanced new watches consisting of new genuine Rolex watches which had been enhanced by substituting non-genuine parts, such as a diamond bezel and/or bracelet; converted used watches by re-casing genuine old Rolex movements in non-genuine Rolex cases; and finally, mated non-genuine bracelets with genuine Rolex clasps. The District Court enjoined certain of these activities in broad language which defendant maintained only banned reconstructed watches. It further enjoined Defendant from accompanying modified Rolex watches with instructions bearing the Rolex mark. The District Court also found that individual replacement parts did not pose the same potential confusion since the marks on the replacement parts are not sufficiently similar to Rolex's trademark to cause a likelihood of confusion. No damages or attorneys' fees were awarded. There were cross appeals. Defendant argued that the injunction did not cover enhanced new watches. The Court of Appeals disagreed. The Court found that the language of the injunction covered enhanced new watches, converted used watches and non-genuine bands mated with genuine clasps, but not parts without Plaintiff's mark. Rolex argued that the District Court erred by failing to find that Defendant's enhanced new watches, converted used watches, and bracelets with genuine Rolex clasps were counterfeit and, as such it was entitled to treble damages and attorneys' fees. The Fifth Circuit noted that the trial judge failed to award profits on the basis that they were de minimus and that Defendant did not engage in deliberate infringement. The District Court never addressed the question of whether Defendant's activities constituted trademark counterfeiting. Accordingly, the case was remanded for a determination as to counterfeiting. If the District Court finds it is not counterfeiting, then the question of awarding attorneys' fees for deliberate infringement would rest with the discretion of the District Court. The Court noted that there was little or no evidence to show that Defendant was trying to pawn off his products to his customers and thus the Court's decision not to award the profits and attorneys' fees was within the judge's discretion absent a finding of counterfeiting. The decision can be viewed at: http://www.ca5.uscourts.gov/opinions/pub/97/97-10991-CV0.HTM WHICH WALT DISNEY COMPANY? Rapp v. The Walt Disney Company, Inc. (E.D. Pa. -September 1998) Plaintiff sued The Walt Disney Company (WDC) alleging copyright infringement. WDC moved to dismiss for lack of personal jurisdiction and improper venue or, in the alternative, to transfer. The suit involves the copyright in the logo used in connection with a play entitled, "My Dinner With Uncle G." The logo is composed of a disembodied hand holding a fork and spoon with strands of spaghetti hanging down to the word "Uncle G." In May 1998, Plaintiff was informed that WDC, through Touchstone Pictures, was releasing a film entitled "Jane Austen's Mafia" and, in connection with that film, had developed a logo similar to the logo for "Uncle G" different only in that the strands of spaghetti lead to the word "Mafia" and there is a bowl of spaghetti underneath. Plaintiff contacted WDC's attorneys. After receiving no reply, Plaintiff sued. WDC has moved to dismiss for improper venue and lack of personal jurisdiction. Because this is a copyright action, the inquiries are combined under the provisions of 28 U.S.C. Sec. 1400. Basically, venue is always proper in the district in which the Defendant or his agent resides or may be found, i.e., subject to personal jurisdiction. The District Court is bound to apply the long arm statute of Pennsylvania where it sat to determine whether or not personal jurisdiction exists. WDC does not, itself, have any contact with the Eastern District of Pennsylvania. When analyzed, the predicate to WDC's motion is simply that plaintiff got the wrong Defendant in this matter. The defendant should be Walt Disney Pictures and Television (WDPT) which has sufficient contacts for jurisdiction. Plaintiff disagreed and sought to impute the contacts of WDPT to WDC. In other words, Plaintiff attempted to show that WDC controlled WDPT to the extent that WDPT was really the "alter ego or agent" of WDC. Plaintiff pointed out that the original letter to Touchstone Pictures was responded to by WDC's legal department and thereafter all communication was sent to and mailed from WDC. Further, WDC's account with the United States Copyright Office was used to pay for the copyright application for the Mafia logo. Plaintiff claimed that this constitutes co- mingling of funds between WDC and WDPT. This implication was refuted by affidavits and other submissions in connection with the motion which showed that the companies operated independently. WDC explained that it was a common practice for a parent corporation's legal department to use the Copyright Office account when filing on behalf of a subsidiary, just as a law firm would do for a client. It was Plaintiff's burden to prove the alter-ego relationship. A parent corporation's legal department may represent the subsidiary without subjecting the parent to the jurisdiction or liability for its subsidiaries. The Court found that plaintiff's allegations were insufficient to impute the contacts of WDPT to WDC and granted the summary judgement. The decision can be viewed at: http://www.paed.uscourts.gov/opinions/98D0920P.HTM INNOVATIVE BUSINESS - INNOVATIVE COPYRIGHT INFRINGEMENT Ryan, et al. v. Carl Corp., et al. (N.D. Cal -October 13, 1998) Defendants function like a private inter-library loan service. They maintain a database of article titles from about 17,000 periodicals. Their customers, mostly libraries, can search the database by title, author, periodical title and subject. When an article is requested, Defendants go to a library containing the periodical in question, copy the article and forward it to the customer for a fee. Defendants do get permission and send a copyright payment to the publisher but do not get either permission from or make a payment to the authors of the individual articles. Plaintiffs are authors of articles that were published in magazines which were copied by Defendants. Each of the articles in question was independently copyrighted by the author. Plaintiffs brought a class action suit in October 1997. As of yet, no motion for class certification has been filed. Plaintiffs have moved for partial summary judgment asking the Court to strike Defendants' second affirmative defense that the publishers had the right to license and thus the usage was proper. First, the Defendants argued that Plaintiffs lacked standing because the articles were copied at their own request, i.e., the Plaintiffs had detectives order the copies to show infringement. The Court found that even if they lacked standing, this was a class action and, accordingly, that there were members of the class which would clearly have standing. The Court made short thrift of the two arguments presented by the Defendants that no actual injury had occurred since Plaintiffs requested the copying. The injury here is not the copying but that Defendants failed to pay royalties to Plaintiffs. Defendants also argued that there was no injury because the Plaintiffs, by requesting copies, authorized Defendants to reproduce the articles. Since this request was done by investigators trying to confirm infringement, it was clear to the Court that Plaintiffs were not authorizing Defendants' conduct. The crux of the case is in the meaning of "as part of" in Section 201(c) which reads in part: (c) Contributions to Collective Works. - Copyright in each separate contribution to a collective work is distinct from copyright in the collective work as a whole, and vests initially in the author of the contribution. In the absence of an express transfer of the copyright or of any rights under it, the owner of copyright in the collective work is presumed to have acquired only the privilege of reproducing and distributing the contribution as part of that particular collective work, any revision of that collective work, and any later collective work in the same series. Plaintiffs maintain that their publishers may reproduce only in the original collective work, in a revised collective work or a later collective work in the same series. Defendants photocopy was of the individuals' articles, and, thus, they are not producing them "as part" of a collective work. Defendants' read the same section to indicate that publishers rights to produce each original work which is "part" of the collective work even if the entire work is not reproduced and, thus, the payment to the publishers would be sufficient royalty payment in such situations. The Court found that both the language and the history of Section 201(c) suggests that when in doubt a Court should consider the rights of publishers narrowly rather than broadly with relation to those authors and, accordingly, found that Plaintiffs' interpretation of Section 201(c) was more in line with the history of the statute. The decision may be viewed at: http://www.ljx.com/LJXfiles/freelance/101398.html STREETWISE IS NOT STREETSMART Streetwise Maps, Inc. v. VanDam, Inc. et al. (Second Cir. -October 27, 1998) Plaintiff had a great idea when it developed a simplified, foldable, laminated street map. As noted by the Court, "as with most good ideas, imitators were quick to follow." Some ten years after Plaintiff introduced its STREETWISE maps, Defendant began selling a foldable, laminated street map for New York City under the trademark STREETSMART. Plaintiff sued under the Lanham Act for infringement of its registered mark STREETWISE and for copyright infringement of its map. The District Court found for Defendants in their motion for summary judgment dismissing both the trademark and copyright aspects of the case. Plaintiff appealed to the Second Circuit who, in this opinion, affirms both decisions. In doing so, the Second Circuit adds some gloss to the requirements for trademark and copyright infringement. In reviewing the factors which are weighed in determining trademark infringement in the Second Circuit, the Second Circuit weighed the relative strength of the STREETWISE mark and found that while it was suggestive, it was not a strong mark due to the use of similar names such as STREETMATE and STREET SCENE in the same industry. While in the abstract of comparing two words there is some similarity between the marks, the Court noted the differences in overall impression due to different logos, colors and typeface created a different overall commercial impression. A key factor in the Second Circuit decision is the good faith of the defendant. Here, the Court distinguished as vastly different an intent to compete by imitating the successful feature of another's product and the intent to deceive purchasers as to the source of the product. Here, the District Court had found no intent to deceive, based on the facts before it, and the Court agreed that the question of good faith is best left in the hands of the trier of fact. The Court found it relatively easy to find non infringement. In order for there to be copyright infringement, there must be substantial similarity between the protectable elements of the two works. It appears that the only similarity between the maps is two colors selected to portray New York's geographical features: purple for water and white for the street grid. The Court looked at the maps as a whole and found that there was not substantial similarity between the protective elements of the two. The decision can be viewed at: http://www.law.pace.edu/lawlib/legal/us-legal/judiciary/second-circuit/test3/97-7943.opn.html |
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